Engro Corp’s profit surges 23% to Rs21.9b

Increase comes on back of jump in other income

KARACHI: Engro Corporation recorded a profit of Rs21.9 billion for nine months ended September 30, 2019, up nearly 23% mainly because of increase in other income.

The company had posted earnings of Rs17.9 billion in the same period of previous year. Earnings per share stood at Rs22.61 in Jan-Sept 2019 compared to Rs17.27 in the same period of previous year, according to a notice sent to the Pakistan Stock Exchange (PSX) on Thursday.

Engro Corporation reported net revenue of Rs149.4 billion in the nine-month period, which was 30.3% higher than Rs114.6 billion in the previous year. Other income came in at Rs10.3 billion, up 60.3% from Rs6.4 billion in the previous year.

“Among the subsidiaries, Engro Fertilisers’ earnings declined 35% year-on-year to Rs3.32 billion in 3Q2019 amid decrease in volumetric sales, higher gas cost and one-off deferred tax charge,” stated Topline Securities’ analyst Sunny Kumar.

“However, profit from the chemical business increased 17% year-on-year to Rs1.29 billion in 3Q2019 due to rise in PVC margins and other income,” he added.

Finance cost of Engro Corporation jumped 156.6% to Rs9.4 billion in the nine-month period compared to Rs3.6 billion in the previous year.

“The finance cost went up due to the hike in policy rate and the impact of rupee devaluation on foreign borrowing,” Kumar said.

Share price of Engro Corporation rose Rs3.38 or 1.17% to stand at Rs293.23 with trading volume of 1.5 million. Overall, the benchmark KSE 100-share Index recorded an increase of 322.79 points, or 0.97%, to settle at 33,762.48.

Administrative expenses of the company grew to Rs4.5 billion from Rs4 billion in the previous year on the back of expenditures being made on the creation of Engro Leadership Academy - for the training of employees - and other feasibilities-related expenses.

Kumar identified poor crop season, scarcity of water for sowing season, volatility in polymer margins and change in regulatory structure in the Energy Division as key risks for the holding company.

Quarterly results

Engro Corporation posted a profit of Rs10.4 billion for the quarter ended September 30, 2019, up 53% from Rs6.8 billion in the same period of previous year.

The board of directors also announced an interim cash dividend of Rs8 per share. It was in addition to the interim dividend of Rs15 per share that had already been paid.

Earnings per share stood at Rs10.67 in the quarter under review compared to Rs6.69 in the previous year.

Published in The Express Tribune, October 25^th, 2019.

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